T-Mobile's losses become 3's gain?

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In anticipation of T-Mobile's first quarter results this week, rumours are rife that the UK arm of German company Deutsche Telekom will have to be sold, or at least merged, to survive.

Losses for the company, estimated to be worth £3.2 billion, are expected to go into the billions this week with estimates settling around the £1.6 billion mark.

It has been reported that Deutsche Telekom’s shareholders, the German government and private equity group Blackstone, are putting pressure on the company to get rid of T-Mobile as it is bringing its profits down.

The most likely outcome seems to be a merger with mobile firm 3, according to reports. The two companies have worked together since 2007 with 3G base stations across the country so to grow this partnership would seem logical.

Also Timotheus Hoettges, chief financial officer at T-Mobile, said on Friday: “The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side.”

Unthinkable, however, could also mean rumours of selling to one of the other top providers such as Orange move from fiction to fact.

When approached for information by IT PRO on the acquisition and merger rumours currently circulating, T-Mobile declined to comment.

T-Mobile is not the first mobile phone company to suffer this quarter with recent reports from IDC and Strategic Analytics that the industry has seen its worst shipping figures since it began 27 years ago.

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